ZCZC
BCN-13
COMMODITIES-ECONOMY-OIL-PRICES
Gold above $1,400 on weak dollar and geopolitical, economic worry
HONG KONG, June 21, 2019 (BSS/AFP) – Oil prices broke $1,400 a barrel to
hit a near six-year high on Friday as the weaker dollar, economic concerns
and geopolitical tensions saw investors pile into the safe-haven commodity.
Demand surged after the Federal Reserve on Wednesday indicated it would
likely cut interest rates soon — for the first time in a decade — which
sent the dollar tumbling across the board and making it cheaper to buy the
yellow metal.
The announcement came as central banks around the world adopt a more
dovish stance in the face of a stuttering global economy and as investors
fret over the trade outlook with the US and China embroiled in a long-running
trade war.
It also coincided with news that Iran had shot down a US “spy drone”,
which it said was in its airspace, ratcheting up a standoff with Washington
and fuelling concerns of a conflict between the old enemies.
Gold prices have surged around 10 percent in June and an ounce cost $1,405
in Asian trade, its highest since September 2013.
“Toppling bond yields have historically been significant indicators for
the pulse of the markets,” said Stephen Innes, managing partner at Vanguard
Markets.
“Falling yields continue flashing red with recessionary concerns, while
the strengthening yen is a harbinger of market worries, suggesting that haven
demand is loading up on risk premiums as the potential for geopolitical
trouble mounts.”
BSS/AFP/HR/1020